A welcome 3 day weekend ahead

Initial claims are estimated to be 5.5mm after last week’s print of 6.6mm and the 3.3mm in the week prior. The high end estimate is 7.5mm and considering how much the prior two weeks exceeded the forecasts, the guess is certainly that it will be closer to that 7mm figure. Because those that are filing have access to up to $1000 a week in some states, more than some were making previously, there is a generous safety net here. Assuming we begin reopening the economy before these added benefits expire sometime in July, the key will be convincing those getting benefits to come back to work. Higher pay might be needed for that in some cases.

With this rally in stocks, essentially a 50% retracement of the decline, individual investors according to AAII were still more bearish than bullish but less so. Bears fell by 5.1 pts to 44.7 after peaking two weeks ago at 52.10 while Bulls rose 2.4 pts  to 36.6. Its recent low was 29.7 four weeks ago. While the rise in Bears above 50 was a good contrarian back drop for a bottom, a more definitive one would have also had Bulls below 20. Right now Bulls are basically at their average level over the past 10 years. Bears are about 14 pts above.

Jay Powell will speak at 10am to give his updated thoughts on the economy and the steps the Fed has taken to unfreeze parts of the credit markets. The Fed’s ability to stimulate is now done but their ability to come up with another credit facility is always possible if needed and hopefully it won’t be.

The other thing of note today will be the OPEC+ meeting and 10mm barrels is the bar in terms of what is the least amount they need to cut for it to matter. They want the US to cut production too but with independent companies running the show here, I have no idea how that would be even possible in a coordinated fashion. Either way, it’s already happening across the industry.